2015 (4) TMI 1070 - AT - Service Tax

Refund claim - Commercial or Industrial Construction Services - Appellant constructed building being used as the hostel for the residence of students studying in medical institute and contended that they are not covered under any of the taxable category - Held that the building constructed was used as hostel for the residence of students studying in medical institute and was not for any other purpose. So, by taking the facts of Board Circular No. 80/10/2004-S.T., dated 10.9.2004, which clearly states that the leviability of Service Tax would depend primarily upon whether the building or civil structure is used or to be used for commerce or industry. The information about this has to be gathered from the approved plan of the building or civil construction. Such constructions which are for the use of organizations or institutions being established solely for educational, religious, charitable, health, sanitation or philanthropic purposes and not for the purposes of profit are not taxable being, non-commercial in nature. Therefore, service tax was not liable on appellant and as it has wrongly paid, can claim for refund. - Decided in favour of appellant with consequential relief

Summary

Issues:
Refund claim rejection under Commercial or Industrial Construction Services category.

Analysis:
The appeal was filed against the rejection of a refund claim under the Commercial or Industrial Construction Services category. The appellant believed the construction fell under works contract services but was informed that it did not fit any taxable category as it was for a medical institute's hostel. The lower authorities issued show cause notices for service tax payment and interest, claiming lack of evidence that the building was not for commercial or industrial use. The Tribunal previously ruled in favor of the appellant in a related case. The impugned order rejected the refund claim, stating the appellant correctly paid the tax. However, a circular clarified that constructions for educational, religious, charitable, health, or philanthropic purposes, not for profit, are non-taxable. Since the hostel was for students and not commercial, the appellant was not liable for service tax. The impugned order was set aside, and the appeal was allowed with consequential relief.

In conclusion, the Tribunal found that the construction of the hostel did not fall under taxable services, as previously determined in a related case. The impugned order rejecting the refund claim was set aside, and the appeal was allowed with consequential relief.